For a month that typically inspires thoughts of rebirth, renewal, and a celebration of life, this March brought quite the opposite. As the novel coronavirus, COVID-19, gradually took over the national conversation—first as a belated recognition that the United States would not be spared, then as a rapidly cascading subordination of nearly every aspect of our daily lives—we all were forced to reassess and reconstruct our routines and activities on a nearly constant basis, with each passing day feeling more like a week or a month. In place of the usual spring awakening, we have instead been forced to confront a profound and dramatic sense of loss. For some, the loss has been permanent and acute, with the sudden passing of a loved one to the disease. For others, the loss has been perhaps more temporal, but nonetheless real, with the loss of a job or accumulated retirement savings. And for all of us, there has been a considerable loss of shared experiences and (in many cases) life milestones: social gatherings deprived, sporting events not played, church services not conducted, school events and graduations not celebrated.
As the cancellations and restrictions have steadily piled up, we all have been asked to rapidly reconsider what is truly important, required, and “essential”, both to each of us individually and to all of us collectively, as a society. For financial planners, attempting to achieve this sort of clarity is, in fact, a part of our daily job: in our process of “needs-based” financial planning, we regularly isolate “discretionary expenses” as a separate category, in order to help generate some idea of what could, in theory, be sacrificed in a time of great financial distress. But this month—perhaps more so than any other month in our nation’s history—the concept of “discretionary” became much broader in scope. Everything, it seemed, was made suddenly discretionary as we embraced “social distancing” as our new national pastime. As quarantine and “stay-at-home” orders became ever more common, our options for spending time and money became accordingly more limited by the day. From haircuts and manicures to cocktail hours and golf outings, all manner of usually recurring expenses instantly became, for lack of a better word, expendable.
With all of these changes occurring, an odd but important question emerged: what, ultimately, do we all actually “need” in our lives, versus merely “want”? We can, of course, survive—at least for a few days or weeks—without our usual coffee fix, our personal trainer sessions, or our spring break vacations. What many of us have learned, however, is that some of the things that we do in fact need are not goods or services to be purchased, necessarily, but experiences to be savored. We human beings are, at our core, social animals, and what so often defines us as a society is our ability and desire to gather: to celebrate together, to rejoice together, and, when necessary, to grieve together. This dynamic is, in fact, what has made the recent imposition of “social distancing” so achingly difficult for so many of us—we all have spent lifetimes crafting relationships and daily rhythms and traditions, only to see them taken away from us in an instant. Sometimes, the most essential aspects of our daily lives cannot be captured on a spreadsheet or a bar chart.
And that is why, along with our recent sense of loss can also emerge new recognitions: with simplification often comes clarity, spurring a new resourcefulness and gratitude for that which we so often take for granted as mundane. Indeed, as difficult as our new socially-distanced lives may seem, we can also remain grateful for what we do still have, and for our continued health. After all, for all that we may have lost, we also are lucky to have experienced this pandemic—and the resultant stay-at-home orders—at arguably the best possible time in world history: options for telecommuting, at-home schooling, and even continued social interactions abound, allowing us to remain connected even as we are forced apart. From Zoom and FaceTime to Netflix and Amazon, the number of things that we are now able to do, to experience—and, yes, to purchase—from the comfort of our own living rooms has never been greater. Armed only with a laptop or phone and an active data connection, we can still play games with friends, watch movies (both new and old), enjoy replays of classic sports games, and order all manner of food and other goods to be delivered to our doorstep with little more than a push of a button.
And of course, none of this would be possible without the continued work of so many others, individuals whose efforts we can easily overlook in more normal times. Even as daily life (and our entire economy) has ground seemingly to a halt, there are many in our country for whom the work has not stopped, and has in fact intensified. This is true not only for the health care workers who have spent weeks in an ever-intensifying “war zone” environment, but also the delivery drivers, warehouse workers, and grocery store clerks who continue to work—and to put themselves in harm’s way—in order to ensure that the rest of us are well-equipped with the essential goods and services that will, ultimately, help us as a nation to get through this multifaceted crisis. If prolonged economic booms can sometimes serve to make the disparities and differences among us more stark, then times of crisis have a similar way of clarifying what it is that unifies us as a nation, and even as a species.
If nothing else, this unique crisis should help give us all a greater appreciation for the interconnectedness that makes our society work so smoothly—and for the vulnerabilities that emerge when one part stops working well, for any reason. Whatever our world looks like when we do eventually emerge on the other side of the coronavirus pandemic, it seems clear that we will do so while embracing a greater level of conservatism and redundancy—both individuals and companies will surely reconsider the importance (and purpose) of sufficient “emergency funds”, and planning for the “unlikely, but catastrophic” outcomes will likely take on renewed urgency.
For us at Cypress, we will continue to guide you through the ups and downs of the market, while also focusing on other aspects of financial planning that become more pressing at times like these. In doing so, we will focus not only on how much money you have (or will have in the future), but on why you have that money to begin with, and what it will enable you to do. Understanding why we invest is just as important as understanding how (and how much) we invest. Now, more than ever, that must be our primary focus.
